TechnipFMC: It’s a wrap on Guyana’s flagship $1.9 billion gas-to-energy project (Video)

UK-headquartered energy technology provider TechnipFMC has put the finishing touches on its assignment at a gas-to-energy (GtE) project off Guyana’s Atlantic coast, which is envisioned to enable infrastructure buildout required to allow for natural gas to be transported from an oilfield in the waters of the prolific Stabroek Block to an integrated natural gas liquid (NGL) plant and a 300 MW combined cycle power plant at Wales on the West Bank of Demerara.

With new hydrocarbon discoveries peppering the Guyana-Suriname basin, the black gold boom turned the country on South America’s North Atlantic coast into an exploration hotspot, prompting the Guyanese government to assign the development of natural gas resources to the pile containing its key priorities in the oil and gas industry. This led to the quest to bring Guyana’s first gas-to-shore project to life, as a way to combat the price shocks and halve electricity costs, sparking economic growth and bolstering the country’s energy security.

To that end, the Natural Resources Ministry of the country in the northeastern corner of South America engaged in multiple discussions with ExxonMobil and its Stabroek Block partners, Hess Corporation and CNOOC, to find common ground and iron out the plans to tap into and monetize the total reserves of associated gas.

Given Guyana’s zest for harnessing its associated gas reserves, the government set the stage to find an independent third-party operator to either work with the U.S. oil major on the project or carry out the activity on its own, tackling the design, finance, construction, and operation of gas infrastructure to support upstream developments in the country.

The solutions to put in place gas infrastructure, including the necessary pipelines to connect and monetize upstream gas, transporting up to 50 million standard cubic feet per day of natural gas from the U.S. energy heavyweight’s Liza Phase 1 and 2 offshore projects via pipeline to onshore gas processing facilities. The gas-to-power project, which became the most expensive energy venture in Guyana’s history with a $1.7 billion price tag, was anticipated to be in operation by the end of 2024.

Based on the planned development, an ExxonMobil-led consortium is in charge of constructing a 12-inch diameter pipeline network and footing the bill of around $1 billion, connecting the pipeline to the Liza Phase 1 and 2 projects in Guyana’s ultra-deep waters. The pipeline was expected to be able to offtake 130 million standard cubic feet of gas per day if the local and regional demand matrix calls for it. 

On the other hand, the country’s government has been entrusted with the construction of onshore facilities, valued at approximately $759 million and consisting of a 300 MW natural gas power plant and an NGL plant, managed by CH4 Lindsayca. Following the decision from July 2022 to move forward with the project, ExxonMobil hired Subsea7 and Van Oord to install an offshore pipeline.

Shortly after TechnipFMC was selected to construct and install subsea risers and pipelines, the government tapped CH4 Lindsayca to build a 300 MW combined cycle and NGL plant. After the Environmental Protection Agency (EPA) gave the green light for the pipeline and NGL plant, ExxonMobil tasked SICIM and GAICO to install an onshore pipeline. Once June 2023 rolled in, the offshore pipelaying began and the government opted for Kalpataru Project to establish transmission lines and substations.

The gas-to-energy project suffered a six-month setback, as confirmed earlier this year, thus, the total cost estimate rose from $1.7 billion to about $1.9 billion, with the first gas bumped to 2025. The Guyanese government applied to the U.S. Exim Bank for a loan amounting to $660 million. ExxonMobil Guyana Limited (EMGL), as the operator of the Stabroek Block, kept going forward with the construction of the 225-km gas pipeline to facilitate the onshore project’s power plant, gas processing facility, and transmission lines.

According to the company, the $1 billion pipeline would be ready by the end of the year but onshore activities ran into delays, with the onshore construction lagging behind schedule. In line with ExxonMobil’s expectations for the end of the offshore pipeline segment, TechnipFMC completed the in-field operations for the gas-to-energy project in Guyana, emphasizing the role of “proper” planning, engineering, and preparation in ensuring “a flawless execution” by its Deep Blue pipelay vessel and Olympic Challenger support vessel.

The subsea pipe layer was refurbished in 2022 when Royston completed an overhaul of diesel power systems onboard the subsea construction vessel, which was in transit from Las Palmas to Rio de Janeiro. New heads, liners, and piston rings were also installed while the air cooler, oil cooler, fuel pumps, and pipes were refurbished. The Deep Blue ship can lay flexible flowlines, rigid pipes, and umbilicals in water depths ranging from 75 to 2,500 m.

TechnipFMC vessels finish in-field operations for the gas-to-energy project in Guyana

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After the natural gas pipeline tie-in was finished, the oil production was restarted at two FPSOs, Liza Unity and Destiny, which were put into offline mode during pipeline tie-ins for the gas-to-energy project. The FPSOs have since resumed their full production levels. The first FPSO at the Liza field in the Stabroek block, Liza Destiny, started production in December 2019 as part of the Liza Phase 1 development.

The second one, Liza Unity, began production in February 2022, as part of the Liza Phase 2 development. A third FPSO, Prosperity, is working at ExxonMobil’s third development, called Payara. In addition, construction is underway on FPSOs for the Yellowtail and Uaru projects, which are the fourth and fifth developments offshore Guyana.

While the first is anticipated to start production in 2025, the second is targeted to join the other four FPSOs in 2026. Recently, ExxonMobil made a final investment decision (FID) to develop Whiptail, its sixth project in the Stabroek Block.

As a result of a series of discoveries that have been made and continue to spring up, Rystad Energy’s research in 2022 forecasted that the government’s revenue from domestic production would reach $7.5 billion annually in 2030.

Previous attempts to stop the gas project did not garner the support needed to proceed with a court case, thus, the opponents were forced to play a waiting game and monitor the developments until they ran across something they could latch onto to put an end to the development.

While the gas-to-energy project has the potential to unleash a cheaper, domestic energy supply, a lot of eyes are on the project and any mistakes or mishaps would spur legal challenges as environmental activists do not consider gas as a transition fuel, instead they lump it in the same high-emission group as other fossil fuels. 

As the snag in onshore construction gives the impression that the future of the project is left hanging in the proverbial balance, Dr. Mohamed Irfaan Ali, Guyana’s President, recently raised the expectations gas bar with the announcement that the country’s government was evaluating the feasibility of a second major gas initiative to complement the ongoing one at Wales, Essequibo Islands-West Demerara.

Meanwhile, ExxonMobil remains committed to developing its existing projects in Guyana’s Stabroek Block along with Hammerhead, as its seventh oil project, to add up to 180,000 barrels per day (bpd) by 2029, raising the country’s overall production capacity bar to nearly 1.5 million bpd.

With more than 11 billion barrels of oil equivalent at its disposal, the U.S. heavyweight has hinted at the potential for up to ten FPSOs to be put in operation. The existing plan outlines six FPSOs that will be online by 2027-end, with a gross production capacity of more than 1.2 million barrels of oil per day.

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